Alphabet Inc., the parent company of Google, has reported stronger-than-expected earnings, with revenue rising sharply as the technology giant ramps up investment in artificial intelligence and cloud computing services.
The company said revenue grew 18 per cent year-on-year in the latest quarter, pushing full-year revenue above $400 billion for the first time since Alphabet was founded in 1998 by Larry Page and Sergey Brin.
Despite the strong performance, Alphabet disclosed plans to nearly double capital expenditure as competition intensifies in Silicon Valley’s AI race. The company expects to spend between $175 billion and $185 billion in 2026—almost double its 2025 investment—to expand computing infrastructure and meet growing demand for AI-powered products.
Chief Executive Officer Sundar Pichai said demand continues to outpace supply, even as Alphabet accelerates capacity expansion. “We’ve been supply constrained even as we’ve been ramping up our capacity,” he said during an earnings call.
Google’s Gemini artificial intelligence platform recorded rapid growth, ending the year with 750 million monthly users, an increase of 100 million from the previous quarter. Emarketer analyst Nate Elliott said Google is on track to overtake OpenAI as the leading AI platform this year.
Alphabet generated $113.8 billion in revenue in the fourth quarter of 2025, driven largely by its core search and cloud businesses. Net profit for the quarter stood at $34.5 billion, while cloud revenue surged 48 per cent to $17.7 billion.
Pichai said the company’s expanding AI infrastructure is delivering broad-based growth. Google’s search and advertising segment remained the main revenue source, rising to $82.3 billion from $72.5 billion a year earlier.
Strong cash flows from advertising continue to support Alphabet’s heavy investment in AI infrastructure. The company also reported more than 325 million paid subscriptions across consumer services such as Google One and YouTube Premium.
Google Cloud, which competes with Amazon Web Services and Microsoft Azure, has emerged as a major growth engine for the group.
Alphabet also continues to benefit from a US court ruling last year that spared the company from divesting its Chrome browser amid antitrust concerns. However, Google has filed an appeal against a separate ruling that found it held an illegal monopoly in online search.
Meanwhile, Alphabet’s “Other Bets” division—which includes autonomous driving unit Waymo—reported a loss of $3.6 billion on revenues of $370 million. Waymo recently raised $16 billion in a funding round that valued the unit at $126 billion.
Waymo co-chief executives Tekedra Mawakana and Dmitri Dolgov described the funding as a major milestone for autonomous mobility, saying it would accelerate growth while maintaining high safety standards. The company said it delivered more than 15 million rides last year and now provides over 400,000 rides weekly across six major US cities.
